Cancer nanotheranostic materials are useful in real-time monitoring of drug delivery and therapeutic action against tumor cells as they co-deliver therapeutic and imaging functions. In this study, we report the use of natural fluorescent protein (R-Phycoerythrin (PE)) in the preparation of novel multifunctional Chitosan-Silver-Phycoerythrin Nanocomposites (CS-Ag-PE NCs) and the theranostic potentials of the synthesized nanocomposites (NCs) were evaluated against Triple negative breast cancer (MDA-MB-231) cells. Absorption behavior of the synthesized CS-Ag NCs and CS-Ag-PE NCs at different pH was studied by UV-Vis and FT-IR spectroscopy for determining the interaction of silver with Chitosan and CS-Ag NCs with PE. Morphological features of CS-Ag NCs and CS-Ag-PE NCs and cellular uptake of CS-Ag-PE NCs were evaluated by TEM. Flow cytometry analyses were performed to determine the conjugation efficiency of CS-Ag-NCs to PE, stability of the CS-Ag-PE NCs and cellular localization of NCs at dose-dependent concentrations. Further, we substantiated the effect of CS-Ag-PE NCs in the activation of ROS mediated caspase-dependent intrinsic apoptosis by analyzing of expression of apoptotic proteins and bcl-2 family genes, respectively. The ionic interaction between PE and CS-Ag NCs resulted in a stable theranostic fluorescent NC complex that enabled the real time probing of delivery, distribution and therapeutic functions of NCs in cancer cells. The theranostic NCs of this study exhibited apoptotic induction potential in cancer cells but low toxicity in normal breast cells.